UPS 2010 Annual Report Download - page 75

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
million reduction to retained earnings as of January 1, 2008. These investments are reported in “other
non-current assets” on the consolidated balance sheets.
Compensation-Retirement Benefits: We previously utilized the early measurement date option available in
accounting for our pension and postretirement medical benefit plans, and we measured the funded status of
our plans as of September 30 each year. Under guidance issued by the FASB,we were required to use a
December 31 measurement date for all of our pension and postretirement benefit plans beginning in 2008.
As a result of this change in measurement date, we recorded a cumulative effect after-tax $44 million
reduction to retained earnings as of January 1, 2008.
Beginning in 2009, new guidance was adopted that required disclosures about plan assets of a defined
benefit pension or other postretirement plan, investment policies and strategies, major categories of plan
assets, inputs and valuation techniques used to measure the fair value of plan assets and significant
concentrations of risk within plan assets. These disclosures are provided in Note 5 to the consolidated
financial statements.
Fair Value Measurements and Disclosures: The FASB issued guidance on fair value measurements that
took effect on January 1, 2008 and are presented in Notes 2, 3, 4, 5, and 14 to the consolidated financial
statements. On January 1, 2009, we implemented the previously deferred provisions of this guidance for
nonfinancial assets and liabilities recorded at fair value. The accounting requirements for determining fair
value when the volume and level of activity for an asset or liability have significantly decreased, and for
identifying transactions that are not orderly, contained the FASB’s guidance were adopted on April 1, 2009,
but had an immaterial impact on our consolidated financial statements.
Derivatives and Hedging: The FASB issued certain disclosure requirements for derivatives and hedging
transactions that took effect on January 1, 2009 and are presented in Note 14.
Business Combinations: The FASB issued new accounting requirements for business combinations, which
took effect on January 1, 2009. This new guidance was applied to business combinations completed in 2009,
but had an immaterial impact on our consolidated financial statements.
Consolidation: The FASB issued accounting and presentation requirements for noncontrolling interests,
which took effect on January 1, 2009, however this new guidance had an immaterial impact on our
consolidated financial statements.
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